In my November Investment Advisor column, Growing an Advisory Business in a Rapidly Changing Industry, I addressed how the advisory business is rapidly changing. Growth and profitability of advisory firms are big issues right now, with profitability of firms continuing to fall, due to regulation changes and more competition entering the marketplace. As I wrote, the profitability and growth issue in the advisory business today is not a marketing issue or a sales issue at all—it’s a communication issue.
Following publication of that column, I received many emails from both advisory firms and marketing consultants suggesting that to solve the communication issue we as an industry or an advisory firm can simply create better “elevator speeches.” We’ve all heard that every financial advisory firm needs a 30-second elevator speech that they can recite whenever someone wants to know about their firm. And there’s an army of consultants who are more than willing to help advisors “craft” their speech and messaging and work on their delivery.
Given these advisory industry changes, with my clients, I’ve found focusing on developing communications plans to solve this issue is a much more effective solution. For their firms to solve this problem, I outsource this work to FiComm Partners in Los Angeles and New York City—who have done a lot of thinking and working about advisor communication strategies.
What I like about FiComm’s work is that it approaches the building of communications strategies based not on what advisors want to say about their firms, but rather on what we want the client, prospective, strategic partner and/or employee (really anyone you talk to about your business) to say about you.
Megan Carpenter, one of the FiComm partners, explained the approach this way. “The key to an elevator speech, or marketing story, as we call them, is what happens afterward. Specifically, what does the person who heard it do? If you just tell them about yourself and your firm, and if they remember some of it, they might pass it along if your firm comes up in conversation. We find that advisors get a much better result if they start by thinking about what they want people to tell other people about them and their firm, and then create a ‘story’ about their firm that people will not only want to hear, but one that they’ll want to tell other people.”
To help advisors create their ‘story,’ the FiComm folks work with them on five key elements:
1) Who You Work With
Although there are a number of advisory firms that have been very successful targeting one niche, Megan (and I) are not a big fans of niche marketing for two reasons: it unnecessarily narrows the number of potential clients; and potential clients are most interested in getting help dealing with their financial challenges. Consequently, they tend to be more likely to share an affinity for others who have the same challenges—and for an advisor who helps to solve those challenges. So FiComm suggests that advisors focus on people who are looking for help with similar financial issues: retirement, college, philanthropy, healthcare, etc.